Industry price effects of offshore outsourcing
by Evelyn Wamboye
International Journal of Trade and Global Markets (IJTGM), Vol. 2, No. 1, 2009

Abstract: Within the Stolper-Samuelson (SS) framework, a vast empirical literature has developed around the issue of determining the shift in the labour market fundamentals. These studies suffer a host of shortcomings. In an attempt to transcend those shortcomings, this paper analyses the short and long run effects of offshore outsourcing, technology and education on the US manufacturing industries. It employs the bounds testing approach to error-correction and co-integration. Results show that 52% of the industries in the sample converge to their long run equilibrium. Some plausible explanation for lack of convergence in some industries is the inability to meet their adjustment costs.

Online publication date: Sun, 08-Feb-2009

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